14th Nov 2014 10:22
LONDON (Alliance News) - Sirius Real Estate Ltd Friday said it is confident in its outlook for the full year, after reporting an increase in its pretax profit for the half-year, buoyed by gains in property revaluations and property disposals.
The company, which operates business parks across Germany, posted a pretax profit of EUR15.3 million, up from the EUR11 million profit it reported last year.
Its profit was buoyed by lower administrative expenses, but gains were primarily driven by a EUR11.6 million surplus on the revaluation of its investment properties, compared with EUR5.2 million last year, as well as a EUR1.1 million gain on property disposals, compared with last year when it booked a EUR336,000 loss from disposals.
"Trading during the first six months has continued positively and the implementation of an enhanced dividend policy and intensive capital expenditure programme reflects the company's significantly improved financial position. The board anticipates a good set of results for the full year," said Chairman Robert Sinclair in a statement.
It said that demand for conventional and flexible workspace has remained strong across its 27 core sites, and as a result it continues to trade in line with expectations.
Rental income during the first-half fell to EUR21.5 million, down from EUR23.6 million last year, as the company continued to carry out a disposal programme of non-core properties.
Sirius sold EUR4.55 million of non-income producing land during the period, while it said it has 105,000 square metres of non-income producing land and two non-core low income producing sites identified or available for potential sale.
The company said it saw a further uplift in the value of its property portfolio during the first half, with the entire portfolio valued at EUR463.6 million at the end of the period, a 3.6% increase on the EUR447.7 million value it had on March 31.
"The revaluation uplift is encouraging and is largely due to the increase in rent roll and capital expenditure during the period," it said.
The company said it has now enhanced its dividend policy by improving dividend payments to 65% of funds from operations, reflecting the continuing confidence in the group's trading performance and cash generation.
"This is, in effect, a 27% increase in the dividend pay-out from the previous policy. The dividend will be paid semi-annually," it said.
The company declared an interim dividend of 0.77 cents per share.
Sirius said that average rental rate per square metre per month increased to EUR4.53, compared with EUR4.46 at March 31. It said it achieved new lettings in the period of 54,713 square metres at an average rate of EUR5.54 per square metre, 22% above the average rate of EUR4.53 per square metre being achieved on the portfolio.
Sirius Real Estate shares were trading 0.4% higher Friday morning at EUR0.343 per share.
By Rowena Harris-Doughty; [email protected]; @rharrisdoughty
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